Charts (and Table) of the Weekend: Number of Quarters to Return to Economic Peak, and Comparison to Previous Recoveries
Before yesterday’s report on gross domestic product growth, it was thought that the economy had needed nine quarters before returning to its previous peak achieved in the second quarter of 2008.
After yesterday’s data, with a table accompanied by a chart to placate the “must have charts” crowd, we now know that the number of quarters required was actually ten, by either definition of “recession”:
Though the National Bureau of Economic Research has pegged the beginning of the recession as December 2007, the “normal person” definition of recession, i.e., when the first of at least two consecutive quarters of contraction took place, began in the third quarter of 2008, after the previous quarter’s economic growth. In either case it wasn’t until the tenth quarter after the “recovery” began that GDP came in above where it was when the recession began.
This means that the infamous graph originating at Investor’s Business Daily in mid-2011 requires an update:
The worst recovery ever has been shown to be even worse than we previously thought.